Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market values and adjusted bases: FMV Adjusted Basis Inventory $ 68,000 $ 34,000 Building 510,000 340,000 Land 782,000 1,020,000 Total $ 1,360,000 $ 1,394,000 The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation’s stock received in the exchange was $1,260,000. The transaction met the requirements to be tax-deferred under §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) Assume the corporation assumed a mortgage of $1,460,000 attached to the building and land. Assume the fair market value of the building is now $850,000 and the fair market value of the land is $1,802,000. The fair market value of the stock remains $1,260,000. g. What is the corporation’s adjusted basis in each of the assets received in the exchange? (Do not round intermediate calculations.)
Zhang incorporated her sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation’s stock. The property transferred to the corporation had the following fair market values and adjusted bases:
| FMV | Adjusted Basis | ||||
| Inventory | $ | 68,000 | $ | 34,000 | |
| Building | 510,000 | 340,000 | |||
| Land | 782,000 | 1,020,000 | |||
| Total | $ | 1,360,000 | $ | 1,394,000 | |
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The corporation also assumed a mortgage of $100,000 attached to the building and land. The fair market value of the corporation’s stock received in the exchange was $1,260,000. The transaction met the requirements to be tax-deferred under §351. (Negative amount should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
Assume the corporation assumed a mortgage of $1,460,000 attached to the building and land. Assume the fair market value of the building is now $850,000 and the fair market value of the land is $1,802,000. The fair market value of the stock remains $1,260,000.
g. What is the corporation’s adjusted basis in each of the assets received in the exchange? (Do not round intermediate calculations.)
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